Enbridge‘s. (TSX:ENB) share price has climbed by 7.4% between February 24 and March 28, showing signs of yet another rally for the top energy stock. As of this writing, Enbridge stock trades for $63.62 per share, hovering around its all-time high levels. Solid dividend stocks like Enbridge have the potential to help investors generate reliable passive income for decades.
Being one of the most reliable dividend stocks from the energy sector, the $138.6 billion market-cap Canadian energy infrastructure giant has also increased its payouts each year for the last three decades. At current levels, it offers a 5.9% dividend yield, which alone can make it an attractive investment to consider.
If you’re wondering whether it might be a good investment right now, let’s take a better look to help you make a more informed decision.
Enbridge stock
Enbridge is a giant in the Canadian energy sector, but not because it produces traditional energy products. It has a key role to play in the industry. Enbridge is an energy infrastructure company with an extensive network that allows it to transport a significant chunk of the energy produced in North America. Besides oil and natural gas, its infrastructure also transports renewable power.
Its storage facilities and pipeline network are vital to the North American economy. The high demand for energy makes Enbridge a relevant business across all market cycles. This is another reason many investors consider Enbridge a reliable stock to own in their self-directed investment portfolios.
The recent rally
Over the last year, Enbridge shares have soared. Enbridge stock is up by 30.9% in the last 12 months. In the same period, the S&P/TSX Composite Index, the benchmark index for Canadian equity securities, is up by 11.6%. What is the reason for Enbridge stock outperforming the broader market by a significant margin? The company’s strategy.
The company placed $5 billion worth of its projects into service and made plans for $8 billion more. The company also completed the strategic acquisitions in the US natural gas utilities market to buy three companies and become the largest owner and operator of natural gas utility businesses in North America.
Combined with an already solid business transporting traditional and renewable energy, the deal has diversified the company’s revenue streams further. These are all factors that make it an excellent choice for investors seeking growth and stability in uncertain market conditions.
Foolish takeaway
Enbridge reported record adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2024, up 13% from the previous year. The company also saw its distributable cash flow hit a new high of $12 billion. The low-risk strategy has been paying off well, and its investors are also reaping the benefits.
If you are interested in using dividend investing to create a passive income stream, building a portfolio of reliable dividend stocks with a solid track record of dividend stocks is an excellent strategy. Buying and holding shares of high-quality dividend stocks in a Tax-Free Savings Account (TFSA) can help you enjoy those returns without incurring taxes. To this end, Enbridge stock can be an excellent foundation for such a portfolio.
